Critic offers gloomy economic forecast for Sudbury

Critic offers gloomy economic forecast for Sudbury

Tom Price delivers a presentation he coined the Greater Sudbury Financial Tsunami. It detailed a bleak picture of the city's financial situation. Inflation rates and city budgets have been rising over the past four years at different speeds and Price says if the trend continues, it will swallow Sudbury.

There is a tsunami coming for Sudbury and if the city does not change its ways, it could spell disaster.

Tom Price, special advisor to Ward 2 Coun. Michael Vagnini, told an audience of about 30 people this week that Sudbury could be facing financial ruin.

Price delivered a presentation that he coined the Greater Sudbury Financial Tsunami. It detailed a bleak picture of the city’s financial situation. Inflation rates and city budgets have been rising over the past four years at different speeds and Price said if the trend continues, it will swallow Sudbury.

“When (those two lines) move far enough apart we will be inundated and we will not be able to meet the bills, and this city will have to declare bankruptcy,” Price said. “We need to reverse that trend.”

Among the attendees were several candidates, including mayoral candidates Patricia Mills and Cody Cacciotti, as well as Ward 1 candidate Bob Johnston and Ward 11 candidate John Lindsay.

Sudbury is aging, Price said, and the birth rate is not sufficient to replace older people. There are more than 30,000 people aged 65 and older, while there are fewer than 25,000 people under the age of 15.

“If we don’t have a population in that high-income group — the 40- to 65-year-olds — we are going to suffer as a municipality and as a society,” Price said. “Our new births are not keeping up to those moving into the 65-year-old group.”

Price said there is a vacuum in the community — the dearth of 40- to 65-year-olds means Sudbury will have trouble increasing its tax base with its existing population. The city needs to attract more people of working age, Price said.

He pointed the finger at council, which he said is also wasting the tax money they do collect.

During his presentation at the Lexington Hotel, Price accused the city of double billing. For example, if the fire service is called to a home, homeowners will be charged for those services, in addition to their property taxes. Insurance will often pay for extra charges, but there is no guarantee, Price said.

“If you have a fire, you will be billed for the fire trucks coming to your property and for the firefighters that come out, in addition to your property taxes,” he said. “There was no reduction in our property taxes.”

The city has enlisted the services of a Toronto-based collection agency, which takes 30 per cent of the total cost of the call.

“That 30 per cent could just as easily be in our pockets and in our city’s pockets, but they chose to go that route,” he said.

Price also said the city is more concerned with its wants than its needs. Roads, infrastructure and the sewage system are all needs, while the event centre at the Kingsway Entertainment District and The Junction — which is proposed to include the Art Gallery of Sudbury, the main branch of the public library and a performing arts centre — are merely wants.

Price said there have been a number of “scope changes” that have driven up costs. For example, when it was first pitched, the event centre was priced at about $60 million. The city now says it will cost $100 million, though many people believe the final cost could climb even higher. With interest over a 30-year loan, the arena will cost $187 million.

The Junction, meanwhile, is pegged at $125 million, as of 2017. With interest, it will cost the city about $233 million, Price argued.

“It doesn’t matter whether it comes from federal, provincial or city taxes; we’re still going to pay for it, one way or another,” he said.

The arena on Elgin Street currently has a value of about $60 million, Price said.

“They’re going to demolish and throw away a $50 million to $60 million asset,” he said. “They’re literally going to throw it in a garbage dump.”

When added to the price tag of $233 million, Price said The Junction will end up costing taxpayers more than $280 million.

Price also pointed to the rising costs of Place des Arts.

“Place des Arts has grown from $29 million to $34 million,” Price said.

In addition to the capital costs, Price noted the city has contributed land – a parking lot at Larch and Elgin Streets – worth about $1 million. Place des Arts has also asked the city to contribute $260,000 to operating costs, even though the facility will not be owned by the city.

The impact of all this spending is a major hit to taxpayer pockets, Price said.

If Place des Arts were taxed, the facility could bring in $1.25 million in annual property taxes, Price said. Along with some other projects, he said the city is “walking away from $9.3 million” in property taxes annually.

Price said the KED is also problematic for city coffers. While there could be significant tax returns if the development goes forward as Dario Zulich has outlined, Price said if the land were to be converted into an industrial park – the original intention – there would be another $12 million added to city coffers, he argued.

For every dollar that is removed from the local economy by the Gateway casino – about $100 million annually – Price said Sudbury would retain a nickel.